End-August P2P Lending Platform News Round-up

Totals lent to date (28th August 2019)

*All data correct at the time this blog was compiled.

LOANS TO BUSINESSES

Assetz Capital - £859,700,000

Crowd2Fund - £31,480,000
Funding Circle - £5.4 billion
FundingSecure - £312,397,135
Money & Co - £6 million approx
Rebuildingsociety - £15,800,000
ThinCats - £503,183,000
Invest and Fund - £60 million
LendingCrowd - £63,962,956
ArchOver - £107,281,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.3 billion

Lending Works - £190,014,973

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £859,700,000 - £10.6 million (1.25%) since the last blog.

When this blog was compiled, there were 107 loans in the pipeline with 2 imminently due to be drawndown as Assetz Capital's pipeline continues to expand.

Highlighted Loan: Borrower requested the first <£230k tranche of a £585k facility to purchase a farmhouse in Cumbria which they plan to substantially renovate using the rest of the funding. The initial LTV will be 70.6% and even at the end of the project, the GDV will be 61.3%. As a result, I felt the return of 6.5% pa was a little on the low side but that is not unusual on this site. On a positive note, the developer has plenty of experience with 18 properties in his portfolio and has previously worked with the contractor who is going to do the work on the farmhouse. The portfolio is worth over £3 million which enables the borrower to provide a Personal Guarantee although the proposal didn't provide information as to whether there are any other loans outstanding.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across different sections of the platform's portfolio and are covered by a discretionary Provision Fund (the target rates of return are in brackets):

Quick Access Account (4.1% pa)

30 Day Access Account (5.1% pa)

90 Day Access Account (5.75% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Crowd2Fund

Lent to Date: £31.48 million.

Since the last blog, I have received 5 email notifications about new auctions launching on the site.

Highlighted Loan: Event caterers were looking to raise £80k to improve their marketing and hire an additional chef. The financials suggested that the business could easily cover the costs of the repayments with the most recent Net Profits and Net Assets standing at almost £180k and £328k respectively thus the 10.5% return appeared to be very tempting.

Funding Circle

Lent to Date: £5.4 billion

Funding Circle are unique amongst the major P2P platforms that lend to SMEs in not allowing investors to choose who they lend to. Instead two managed accounts are offered which distribute funds across differing risk profiles of loans within their portfolio. At the moment, these options are projected to offer returns in the ranges of 4.3% - 4.7% pa and 4.5% - 6.5% pa.

As an active rather than passive investor, I am no longer involved with Funding Circle however posters on forums who remain with this site have expressed concerns over the apparent lack of due diligence that is undertaken. Matters may improve as in its latest update to shareholders, Funding Circle advise that they are lowering their growth forecast due to them tightening their criteria for accepting higher risk loans.

Further concerns are being expressed about the liquidity of the site as the amount of time required to sell loans has been increasing according to those posting on forums.

Nonetheless, the site continues to grow with the amount actively on loan increasing by 37% to £3.54 billion over the past 12 months but the company's losses have grown over the same period by <£4 million to £30.8 million.

FundingSecure

Lent to Date: £312,397,135 at end of July – figure updated monthly.

When this blog was compiled there were 4 auctions taking place.

Highlighted Loan: A few months ago the owner of a chain of service stations raised more than £0.5 million via FundingSecure to add an additional outlet to their portfolio. Security was provided via charges over two service stations. The borrower returned recently to raise a further >£81k secured via Second Charges over the same 2 locations – this was to be repaid in 3 or 4 months when VAT rebates are due to be received. The LTV was 63.31% and a return of 13% pa offered. I felt no temptation to invest as the borrower seemed to be getting deeper into debt.

Defaults: A loan was repaid the other week. "Only" 6 months late. There is little to report on my other late loans.

Money & Co

Lent to Date: £6 million approx. (latest available figure)

There were 0 auctions taking place when this blog was compiled.

rebuildingsociety

Lent to Date: £15,800,000 latest figure available.

There were 3 auctions taking place when this blog was compiled.

Highlighted Loan: A company that organises events for Occupational Therapists requested £265.5k to refinance an existing ReBS loan and fund a marketing campaign. This is substantially more than the original loan from 2 years ago which was for £37.1k although the net worth of the director providing the guarantee has increased from £60k to £367k since then – largely it seems due to this company's profits. I wondered why they weren't being re-invested rather than increasing the amount being borrowed. This made me uneasy and I didn't renew my holding from the original loan. The return on offer was 16% pa.

Platform News: It appears as though ReBS are expecting a hard-Brexit as they are adjusting their credit risk model to give more prominence to companies with a strong export presence and also those with boards that have successfully handled previous recessions.

ThinCats

Lent to Date: £503,183,000.

There were 0 auctions taking place when this blog was compiled.

Invest & Fund

Lent to Date: £60 million – latest figure available.

There were 0 auctions taking place when this blog was compiled.

Highlighted Loan: Property Developers from the South East requested their fourth >£50k tranche of a <£555k facility as they continue to convert an existing house into 5 apartments. The latest report from the Monitoring Surveyor indicates that the works are scheduled for completion on schedule during October. At that point, the GDV was expected to be 63.8% while investors were offered a return of 7.25% pa.

LendingCrowd

Lent to Date: £63,962,956 – increase of £368,640 (0.58%) since the last blog.

On the morning this blog was compiled, 0 auctions were taking place.

Highlighted Loan: Wholesalers were looking to raise £136.5k to purchase additional stock across many product lines. The most recent Annual Profits were £169k while Net Assets were almost £1 million. However, the lack of detail in the proposal and the reduction in profits compared to 12 months earlier deterred me from investing.

Platform News: Lending Crowd's Summer Bonus is to offer £50 Cashback to those who transfer an ISA worth £5,000 or more over to them.

ArchOver

Lent to Date: £107,281,000.

There was 1 auction taking place when this blog was compiled.

Highlighted Loan: The developers of software which enables engineers out in the field to be efficiently managed requested £155k to assist with Working Capital and to enable them to hire additional staff. There were some well-known Blue Chip companies amongst their portfolio of clients even though the business was only set up a couple of years ago. The loan was secured against a R&D Tax Rebate claim that was valued at £221k. Investors were offered a return of 10% pa.

CapitalRise

Lent to Date: £25 million approx. (latest available figure)

CapitalRise have listed 2 loans since the last blog.

Highlighted Loan: Recently listed was the first £730k tranche of a £1.47 million facility to develop 3 townhouses in an existing 17th Century Oxfordshire building. The first round of funding will be used to purchase the site which already has planning permission for the intended scheme. The loan will have a term of up to 22 months. With the development expected to take 14 months to complete this allows 8 months for repayment to take place from sales income or via refinancing. The GDV was 65.5% while a return of 8.75% pa was offered.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3.3 billion – latest figure available.

Returns: Interest rates are set according to supply and demand. They currently range from 3.1% pa to 6.0% pa depending on the length of the investment. The latter figure is at the upper end of its usual range.

Capital is covered by a Provision Fund. Ratesetter proudly boast that no investor has lost a penny since they launched in 2010.

Lending Works

Lent to Date: £190,014,973 – an increase of £3,089,525 (1.65%) in the past fortnight.

Returns: 5.0% pa and 6.5% pa depending on whether or not investors require quick access to their funds via an IFISA or standard account for 3 and 5 year investments respectively

As well as a Provision Fund to cover investor's risks, this site also insures borrowers against redundancy, fraud, illness and accidents making this a very fair site for all concerned.

****Disclaimer: This blog contains the views of the Secret Investor. Your capital is at risk when lending via all P2P Platforms. You're recommended to speak to a qualified Independent Financial Advisor.